For-Profit Hospice Fraud Is a Multi-Billion-Dollar Medicare Drain

For-profit hospices now account for 77% of all hospice providers nationwide, and in California that number reaches 94%. This explosive growth has attracted fraud at industrial scale: Los Angeles County alone had 1,841 hospice agencies in 2022, a 1,589% increase since 2010, with 197 hospices registered to a single address in a Van Nuys office building. Regulatory enforcement actions in 2024 identified roughly $143.81 million in alleged fraudulent activity, on top of an estimated $198.1 million in 2023. Why does this matter? Because the fraud is not victimless paperwork. Fake hospices enroll patients who are not terminally ill, billing Medicare for services never rendered while real dying patients struggle to find legitimate providers. Families discover their elderly relatives were enrolled in hospice without their knowledge, sometimes by door-to-door recruiters offering gift cards. The per-diem reimbursement model means a fraudulent hospice can collect $200+ per day per patient for months or years with minimal oversight. The structural reason this persists is that Medicare historically imposed almost no barriers to entry for new hospice providers. Until very recently, there was no moratorium on new hospice enrollment in Medicare, no pre-enrollment site visits, and minimal ongoing audits. CMS only began implementing enhanced screening in late 2024 after years of congressional pressure. The per-diem payment model, combined with the subjective nature of terminal prognosis certification, creates a system where the financial incentive to over-enroll is enormous and the regulatory capacity to catch it is threadbare.